Kaupthing Isle of Man Bank in liquidation - blog

The 'perfect storm' is looming for the Isle of Man

2010-02-18T16:42:00.003Z

As a tiny island the IoM is being tossed like a small rudderless ship in international political & financial stormy waters. As such it has little control on the direction of its future destiny. It will be blown hither & thither as its crew seek to keep it afloat in the face of huge waves breaking over its deck.

Allen Bell, Treasury Minister, has just introduced a 'reactive' budget that reflects the present state of the storm & what he considers necessary to keep the ship afloat. At the same time he acknowledges that "THE WORLD HAS CHANGED". He expresses the blind hope that whatever is thrown at the IoM in the future it will always land on its feet.

However,the ship is seriously holed below the waterline. This is summed up well by Tax Research UK HERE .

The reality is that presently the backbone of the IoM economy is its financial services industry. The figures published today by the IoM Financial Supervision Commission [HERE] show a further decline in deposits & investments. Sterling bank deposits are down by nearly 3 billion, & funds under management are down by 3.3 billion.

Allen Bell attributes this to low interest rates in the international banking arena (notwithstanding the IoM banks offer attractive & competitive interest rates), but this is not the whole picture. He dare not publicly acknowledge the impact of the campaign 'DON'T BANK ON THE ISLE OF MAN' which warns British expats & others HERE of the risks involved in putting their life savings in this offshore jurisdiction. Over 11,000,000 have Googled don't/dont bank on the isle of man, a topic wich now extends to 3 pages on Google.

The reality is the Isle of Man is no longer viewed by millions of potential depositors as an offshore centre on which they would want to trust their savings.

It is only a matter of time now that the financial services industry will cease to be viable on the Isle of Man. The 'perfect storm' is looming to overwhelm this small island ship.

11,380,000 people have 'Googled' DON'T BANK ON THE ISLE OF MAN

2009-12-19T10:55:00.001Z

11,380,000 people have now specifically 'googled' DON'T BANK ON THE ISLE OF MAN (or have typed 'dont' instead of 'don't'). This is a phenomenal increase of over 2,500,000 since 30th.November.

On the basis of these figures it would be fair to predict that the Financial Supervision Commission's statistics for this Quarter will show a further significant decline in the trust that people throughout the world now place in the Isle of Man as a safe offshore centre in which to risk their life savings.

One man who is doing cautious prospective depositors a great service is Richard Murphy who has researched in depth the unsavoury facts about the way the IoM financial services industry operates. This is evidence that very few ordinary Manx citizens are aware, facts that the government would rather they didn't. Sadly of the few who do some would rather shoot the messenger than accept the message.

As a secrecy jurisdiction the island has thrived for many years on how its banks & finance houses have done business. All credit to the IoMtoday journal for publishing Richard's critique HERE

The cat is now out of the bag and the people of the Isle of Man will need to face up to the reality of how the Isle of Man has prospered hitherto. Quite how it will get its house in order remains to be seen. To date that "new mindset" that the Chief Minister says will need to be adopted has not materialised. Instead the 'blame game' is emerging as the order of the day. In this game the government will continue to 'blame' the UK government for all its woes.

Playing the 'blame game' and turning Manx folk against the UK is not going to get the IoM anywhere. It is a smokescreen to put off for as long as possible the adoption of that new mindset through which the IoM becomes truly open, transparent, ethical & honest in the manner in which it operates as an offshore financial centre. Only then will sensible people seriously consider depositing their life savings on the Isle of Man.

Allen Bell does not ring true

2009-12-04T17:35:00.001Z

Allen Bell (Finance Minister) says that the IOM is a 'safe place' to invest. He would wouldn't he? But he does not spell out the basis of his assertion because there isn't any.

In fact John Aspden (chief of the FSC) has told him & the world at large that neither investments nor deposits are 'risk free' on the IoM.

If Allen Bell is right & John Aspden is wrong then he needs to spell out precisely how money put into the IOM is now suddenly 'safe'.

The reality is Allen Bell is engaged on a sales pitch to put the IOM in a good light in the face of the disasterous situation that faces its economy.

Kaupthing depositors were told their money was 100% guaranteed but that turned out not to be true. Now there is a website DON'T BANK ON THE ISLE OF MAN www.kaupthingiom-dag.co.uk that tells expats and others the reasons for not depositing on the IOM.

Depositors & investors are not stupid & are not going to be hoodwinked by propaganda that is clearly aimed at the best interests of the IOM and not at those whose money is so eagerly sought with that objective in mind.

There needs to be a massive injection of ethics, morality, integrity and justice in a new IOM 'mind set' if people are to trust this offshore financial centre. Until then don't gamble; play safe - DON'T BANK ON THE ISLE OF MAN as it could seriously ruin your wealth.

Over 8,800,000 people have Googled DON'T BANK ON THE ISLE OF MAN

2009-11-30T10:48:00.002Z

The Isle of Man considers investment relatively more important than deposits as they are the butter on the bread of the island's economy.

Funds under management on the Isle of Man have fallen from a high of £57.7billion in June 2008 to £34.4 billion end September 2009. That's a massive £23.3billion, a decline of 40.4%. Yet to date the Financial Services Commission choses to make no comment on this decline as to do so would draw critical attention to it.

In the face of the huge holes that are appearing in its financial resources - including a 24% loss of budget revenue as a consequence of HM Treasury's review of the VAT subsidy enjoyed by the IoM - the island's much vaunted AAA Credit Rating is now on notice for being downgraded. The loss of this 9 year old 'sacred cow' will have a major impact on the way the IoM as an offshore financial centre is viewed throughout the world.

Altogether the Isle of Man's economy is now in a precarious position, hence the government is spending £300,000 of taxpayers' money employing PR agencies to promote the Isle of Man as an attractive & desirable place where there is 'freedom to flourish'.

After the financial tsunami of 2008 prospective depositors & investors are now far more on their guard about trusting glossy sales pitches. People are now ultra cautious about where & with whom they put their money. They are doing their own 'due dilligence' looking more closely at the small print and the reality behind the efforts of banks and offshore financial centres to promote a positive image about themselves.

Dispossessed Kaupthing bank depositors are now highlighting the reasons why expats & others should not risk banking on the Isle of Man. This has been dismissed by the IoM as being of no consequence, but the reality is 3,170,000 people have specifically Googled DON'T BANK ON THE ISLE OF MAN and 4,880,000 have Googled DONT BANK ON THE ISLE OF MAN, with an additional 800,000 having Googled DONT BANK ON THE IOM. These are figures that are increasing as the message is being relayed via Twitter, Facebook, blogs and the DON'T BANK ON THE ISLE OF MAN website www.kaupthingiom-dag.co.uk

The wholly justified campaign by & on behalf of dispossessed depositors is not going to go away until the government accepts that there is a real need for it to seek a political solution to restore all lost deposits 100% in order to promote the best interests of the IoM as a safe & trustworthy place in which to deposit & invest.

IoM bank deposits DOWN for 3rd.Quarter

2009-11-23T12:09:00.001Z

The latest figures published by the IoM Financial Supervision Commission show a further decline of £390,000,000 in bank deposits over the previous Quarter. This is a total decline of £3.38billion since April 2009. In the context of the IoM's other troubles it is not surprising that the FSC Board delayed publishing these depressing figures.

No doubt the government will make light of the statistics, attributing them to anything other than the Kaupthing Depositors' Action Group campaign DON'T BANK ON THE ISLE OF MAN. Well they would wouldn't they?

Dispossessed depositors feel that they have a moral obligation to warn expats and others throughout the world of the risks involved in depositing on the Isle of Man. To this end a new website has been launched www.kaupthingiom-dag.co.uk which sets out out some of the reasons why putting your life savings in the trust of the Isle of Man could seriously damage your wealth.

Friday 13th - not the luckiest of days for the Kaupthing directors ?

2009-11-15T16:46:00.004Z

It was Friday 13th when the Tynwald Select Committee - inquiring into the collapse of the Kaupthing IoM bank - questioned the bank's directors.
In front of them was Aidan Doherty, Managing Director, Donald Gelling CBE, who was twice Chief Minister of the IoM government, John Cashen ex Chief Finance Officer at the IoM Treasury, and Andrew Davies, financial director.

10,000 expats & others throughout the world thought people of such high standing who were heading up the bank could be entrusted with their life savings. These directors had used their status to promote the integrity of KSFIoM as a bank that would take care of savings entrusted to its care.

Alas! once the bank had gone bust the best they could do was to say, 13 months after the event, that they had done nothing wrong and that the blame for the collapse of the bank was that of the UK Financial Services Authority that they claimed was sheltering behind a "cloud of secrecy".

HOGWASH! This is the sort of superficial nonsense that brings contempt for bank managers from the public & generates huge distrust in the banking system. It is this very act of directors claiming that they were right to put £557million of the bank' liquid assets into Kaupthing UK that is helping to sink further the trustworthiness of the Isle of Man as a safe place to deposit one’s life savings.

Aidan Doherty said in the bank’s glossy blurb back in 2007 “No one knows what the future will bring but we can stand by you when it comes.” He didn't. Not only did he not do so, but he never did the honourable thing at the time or since by offering an apology for the decision to put £557million of depositors' money into a failing sister bank that promptly went into receivership.

Had he & his colleagues been told by their lawyers to keep their mouths firmly shut? Had they been instructed to cover their rears by finding words of explanation that would put the entire blame elsewhere? Was this the amoral ploy of old that even when you know you are to blame always plead innocent & let the innocent party have the task of proving otherwise?

John Aspden, Chief Executive of the FSC, has already been weighed & found wanting in the eyes of the dispossessed depositors. Now the directors join him in the gallery of those who have sought to save their own skins in the pathetically thin defence of their actions which in the view of depositors was a failure to exercise due dilligence with their hard-earned savings.

What is beyond dispute is the innocent people in the Kaupthing fiasco are the disposssessed depositors. The evidence of the Depositors' Action Group submitted to the Select Committee clearly shows up the true facts behind the actions & decisions of the FSC & the bank's directors. It may be downloaded from the DAG Company's website http://www.ksfiomdag.com HERE

Depositors are trusting this Tynwald Select Committee to demonstrate the highest standard of objective scrutiny of the facts in order that truth & justice will prevail. The credibility & integrity of this British Crown dependency will stand or fall on the outcome of this inquiry into the biggest banking failure in the history of this offshore financial centre.

Depositing savings on the Isle of Man is too risky

2009-11-08T14:55:00.000Z

In a news article in the online 'be your own financial adviser' www.thisismoney.co.uk
Gordon Brown, UK PM said: "..we need to make sure that customers can be confident when they open a bank account that they will be treated fairly; that charges and fees are clear, easy to understand and reasonable; and that their savings are safe."

That is something with which John Aspden, Chief of the IoM Financial Supervision Commission, does not concur. He states that deposits, like investments, on the island carry risk and this has to be recognised by people when depositing their life savings with a bank on the IoM.

Despite this people from around the world still take that risk believing that the reward of a higher interest rate justifies a belief in what the banks tell them concerning the security of their money. That is a dangerous way to make a judgement on whether your money is safe.

Banks only tell prospective depositors what they want them to know; they do not answer the questions depositors ask in order that they may make an informed judgement before parting with their money.

Until the Isle of Man is able to endorse and adopt the principles stated by the British Prime Minister the island can not be considered a safe place to put your money. The message is clear; DONT BANK ON THE ISLE OF MAN as it could seriously damage your wealth.

DON'T BANK ON THE ISLE OF MAN - now riskier than ever.

2009-11-05T10:25:00.001Z

The website Shelter Offshore says here : "The Isle of Man as a jurisdiction has taken a battering in recent months because of the collapse of the offshore arm of the Icelandic bank, Kaupthing Singer & Friedlander on the island. The investor protection scheme in place in the Isle of Man has been criticised for not offering enough protection to those who choose to place their money with institutions within the jurisdiction for example.What’s more, the Isle of Man financial authorities have been called to account by many as they feel that they were not tough enough in terms of the regulations they had in place to prevent financial institutions from collapse. So, are Isle of Man savings accounts worth taking a risk on..?"

The article goes on to say: "So, is the Isle of Man a poor jurisdiction that has sold out those who have lost out from a single bank’s collapse? Or is it just the unlucky jurisdiction that had to deal with a collapsed bank? The truth is certainly in there somewhere – but it depends on who you speak to. We fully, wholeheartedly support the KSFIOM Depositors’ Action Group – who wouldn’t. These are people whose financial losses have devastated their lives in many instances – one cannot ignore these people. Yet at the same time, we support the Isle of Man as a jurisdiction because they have done and are continuing to do what they can to protect those who place money within financial institutions on the island."

What a dichotomy! It is explained by Shelter Offshore having a vested financial interest in promoting investment & deposits on the Isle of Man & other offshore financial centres. Therefore it has a clear bias towards defending the offshore centres themselves, whilst acknowledging that there are risks involved in putting one's trust in them. So it conveniently passes the buck back to the depositor (or investor) by concluding: "When it comes to your money however, you have to make the judgement call for yourself. You need to look at any recommendations you’re given and see whether you agree and feel that yes, the jurisdiction favoured and the financial institution chosen for the enhancement of your wealth is appropriate for not only your risk profile but for your future financial security."

Depositors in Kaupthing have been criticised as fools by Manx people for not fully assessing the risks they were taking in depositing on the Isle of Man. Some have gone so far as to say that they deserved to lose their life savings for not being more circumspect.

The message dispossessed depositors are saying loud & clear to expats and others throughout the world is 'DON'T BANK ON THE ISLE OF MAN as you are at serious risk of losing your wealth.' There's over 30 videos on www.youtube.com making that message clear to all. view here

Foot treads around the IoM wearing slippers

2009-11-03T19:28:00.002Z

The IoMToday online journal [report here] was upbeat in reporting on Tony Brown's fulsome praise of the Foot Review. The Chief Minister will have known in advance that Sir.Michael Foot was not going to kick any goose that lays golden eggs for the benefit of both the IoM & UK economy.

Right from the start of the report there was recognition that offshore financial centres are intended to offer bait to suck in money from around the world which gets upstreamed promptly to the City & elsewhere to make lots of money for banks, corporations, & ultra-rich people. This financial industry is the heartbeat of the IoM's economy & the review had to tailor its comments to fit around that fact.

Of course Tony Brown was utterly predictable in pronouncing fulsome praise of the review. He's not going to focus on any of the critical elements of the report, even though they were penned in the soft language of diplomatic Whitehall scribes. Contrary to what was reported by the IoMToday journal the Review was in fact critical of the way the depositors' compensation scheme operated (see pages 50, 51 & 52), and he said that there was room for improvement in handling criminal activity.

The reality is that Foot could afford to be 'nice' to the Crown dependencies because he knows others in the world's financial hierarchy are ready in the wings to press hard for opacity in the way some offshore agencies operate.

The IoM trumpets that it is going to introduce automatic exchange of information in 2011, but why wait until then to do so? Because instant transparency would be sure to expose very many transgressors! Despite protests of being squeeky clean the powers that be in the IoM know that though they have shed the pejorative label 'tax haven' they have still to get rid of the equally damaging one of 'secrecy jurisdiction'.

The Foot Review addressed the subject in very general terms. Others are looking at it in detail and the government will have to use its new 'mindset' to work out how the island is to rid itself of that label as well. Very challenging times lay ahead for the IoM.

Foot said nothing that we didn't know already

2009-11-01T08:16:00.002Z

Sir Michael Foot said nothing that we didn't know already. In acknowledging the role played by the Crown dependencies in attracting money from across the world & funneling it into the City he could only focus on making recommendations that would make that activity conform with total transparency to mandatory international standards.

However, reading between the lines Foot made observations that would make a wise & prudent person think twice before being lured by higher interest rates into depositing offshore. Depositing on the Isle of Man can not be considered safe & secure until there is a new & credible compensation scheme in place that delivers quickly what it promises should the deposit taker be in trouble.

Until then the message is clear, don't bank on the Isle of Man to look after your life savings in a manner that gives you total peace of mind through an unambiguous assurance that your money is in safe hands. As FTAdviser.com said in its article 'Taking a closer look' "do not be seduced by offers of higher rates or guaranteed returns without a healthily cynical view of the small print."

Foot Review Report here

Alleged corruption in the Isle of Man Office of Fair Trading

2009-10-27T17:26:00.000Z

The following letter speaks for itself:

Open letter to Mr. P. Gelling – Acting Chief Officer of the Isle of Man Office of Fair Trading (OFT)

Copies to: The Chief Officer of the OFT: Mr. N. Black – The Chairmen of the OFT: Mr. W. Henderson The Chief Minister: Mr. A. Brown and other interested parties.

28th October 2009

Dear Mr. Gelling

Open Letter - Corruption in the Isle of Man Office of Fair Trading

The OFT has deprived pensioners of their legal rights by rejecting complaints that the directors of the Premier Low Risk Fund plc (the Fund) dispensed misleading advice in the course of marketing the Fund to the public.

Your office is in receipt of evidence – upheld by a High Court ruling and Financial Services Authority (FSA) adjudications – in support of allegations that the Fund’s directors obtained bank transfers by deception. Yet the OFT continues to reject the pensioner’s complaints.

The ‘ombudsman office’ does not employ an ‘ombudsman’, and on matters concerning the misselling of financial products the office relies on FSA rulings/adjudications as a guiding reference.

To facilitate this process, and as a service to the consumer advice sector, the FSA regularly display their rulings in the ‘Ombudsman News’. A publication which is known to the OFT.

To demonstrate a case against the Fund’s directors – a case which the OFT refuses to address – please find attached extracts from the FSA publication relating to dispensing misleading advice and the unfair imposition of MVAs.

Complaints about the Fund director’s advice include:-

- Advising pensioners that the fund provided capital security and guarantees. Untrue advice
- Advising pensioners that the Fund could provide a regular quarterly income. Untrue advice
- Advising pensioners that the Fund’s investment strategy is low-risk. The FSA and a High Court confirm that the investment strategy is high-risk. Untrue advice
- Failing to advise pensioners that a MVA, without limited in size and duration, may be applied when the pensioners attempt to rescue their savings.
- Enhancing the Fund’s market appeal by disclosing minor ‘exit charges’ in a highly visible, self-explanatory tabulation - and failing to similarly disclose any other charge.

Because passports were required in the application process the directors knew that pensioners were amongst those receiving this misleading advice and this resulted in them being unwittingly deceived into transferring their life savings to a long term, high-risk fund, not capable of providing regular income and liable to an MVA unlimited in amount and duration. All features not fit for pensioners.

Despite this the OFT have used a variety of devices to trick pensioners into believing that the directors conduct was legally acceptable. The OFT’s denials are now exposed and after delaying matters six years the office is now resorting to another tactic by quoting the Financial Services Act 2008 which states:

“The OFT shall decline or cease to act under paragraph 1(3) where it appears to it that the dispute was referred to it under paragraph 1(2) in any case, more than 6 years after that act or omission”.

A statute of limitations cannot apply to the matter of obtaining pensioner’s life savings by deception.

The OFT’s handling of this case is dishonest and apparently a calculated attempt to protect the Fund’s directors.

Someone in your department should summon the courage to report this matter to an authority with the competence to investigate allegations of corruption in the OFT ombudsman’s office.

Quis custodiet ipsos custodes? Who will guard the guards?

signed: PREMIER SHAREHOLDERS GROUP
Pensioners Campaigning for Truth and Justice
Contact us: e-mail: PSA350@orange.es or telephone (0034) 950 39 20 38

A new IoM government 'mindset' offers real hope of a just & honourable settlement of the Kaupthing fiasco

2009-10-20T21:07:00.001+01:00

Today Tony Brown, Chief Minister of the Isle of Man, made a statement to Tynwald on the serious situation in which the island finds itself after HM Treasury had reviewed & modified the Revenue Sharing Arrangement between the IoM & the UK. [full statement in pdf file here]

The decision made by HM Treasury was non-negotiable and means that the IoM will lose revenue of £90million next year & £140million in subsequent years. This equates to an annual loss of revenue in the order of a massive 24%.

The Chief Minister says: "there will without doubt need to be a change of mindset politically..", a statement that he repeated at least 3 times in answering subsequent questions from MHK's.

The financial services industry is the lifeblood of the IoM economy. The position that the Isle of Man now finds itself will have a marked affect on the way the world now views the island as an offshore financial services centre. An accelerating loss in confidence which started with the collapse of the Kaupthing bank could see a massive hemorrhage with money flowing out of the island and deposits & investments drying up. Rapid surgery is now needed.

Dare it be hoped then that this "change of mindset" will now include a courageous political decision to bring about a just & honorable settlement of the Kauthing bank fiasco by a government commitment to restore 100% all deposits lost when the bank went bust due to the actions of the directors, supported by the FSC?

Taxpayers need not be called upon to achieve this. The government with its new mindset must have the political courage to secure the money either through the banks or it should go to HM Treasury & obtain a loan, involving thr IMF if necessary. In either case the loan would be repaid progressively from recovery of the assets, estimated to be approx 83% gross. The shortfall could be made up from & commitment on the part of Iceland to honour the parental guarantee given by the Kaupthing parent bank. Properly negotiated, the IoM Treasury could end up quids in on such a settlement.

The Isle of Man government now has an urgent need to shore up confidence in its banks so as to maintain & sustain the financial services industry that makes up 37% of GDP. The benefits of resolving the festering Kaupthing debacle would far outweigh the cost of failing to do so.

It's time to put the Kaupthing debacle to bed so that depositors & the people of the IoM can all sleep better & look forward to a brighter tomorrow.

Tony Brown, IoM Chief Minister, conceals his contingency plans

2009-10-18T10:20:00.001+01:00

Tony Brown, Chief Minister of the isle of Man, stated on Manx Radio [listen to short replay clip here] that a revision of the VAT sharing agreement will have a significant impact on the Isle of Man, but stressed that the government has contingency plans in place should this happen. Why does he keep them secret? Ooops! silly question — the IoM has been shown by research to be only 17% transparent, [pdf file here] so Tony Brown conveniently choses to keep secret those contingency plans.

Following the fallout of the international financial volcanic eruption of 2008, the offshore game play continues with unwary international depositors being the piggy in the middle. The offshore financial centres of the British Crown dependencies are no longer places that expats & others should trust with their life savings. If they are already ‘in’ on the Isle of Man they should get out quick before the illusionary IoM golden cookie crumbles into sand, as this youtube.com video warns view here

32 videos by dispossessed depositors are spreading this message throughout the world: DON'T BANK ON THE ISLE OF MAN as it could seriously damage your wealth, ruin your health, & take away everything for which you have worked. To view what they say see here

The Isle of Man stands between the devil of its own creation and the deep blue Irish Sea

2009-10-15T21:12:00.004+01:00

Allen Bell, Treasury Minister, does well to warn of tough times ahead for the Isle of Man. www.iomtoday.co.im Unfortunately he views it simplistically by saying without explaining that a new world order is determined to stop the drift of money from high to low tax jurisdictions. That situation is a small part of the larger picture which is about why this drift needs to be stopped in the first place.

Following the international financial tsunami of 2008 there is now increasing international pressure on offshore financial centres that operate as secrecy jurisdictions. The Isle of Man has been shown not to be as transparent as it has tried to make out in overtures to the OECD, the World Bank, the IMF, Washington & the Commonwealth. Voices of reason in the international financial arena are calling for morality to become the cornerstone of the way financial systems operate, & places like the IoM, Guernsey & Jersey are now being put under the microscope.

Has anyone in high places on the Isle of Man every used the word 'moral' to describe the way this offshore financial centre operates? It has demonstrated that it seriously lacks any sense of morality or keen sense of justice in its whole approach to the KSFIoM debacle in particular & the way it conducts its banking business in general.

What comes across so strongly is that the IoM government is hell bent on looking after & protecting its own interests, determined - even before the Select Committee inquiring into the reason for the failure of KSFIoM has completed its deliberations - to claim that the collapse of KSFIoM was not on account of any wrongdoing on the part of the directors or the FSC but on the actions of others elsewhere in Whitehall & Iceland.

This extraordinary immoral arrogance tells dispossessed depositors that they can sing for the return of all their money as the Isle of Man has chosen to stick solely to its defective compensation scheme & treat the fiasco as an unfortunate 'one off' that the government now wants to put behind it so as to carry on 'business as usual'. It was not a 'oneoff'; KSFIoM is the third bank to fail, & there is no reason to believe that others could not do likewise. Indeed the Chief of the FSC has said that non-core banks should be allowed to fail.

Business as usual is business that continues to threaten the livelyhood of anyone who puts their life savings in the trust of the Isle of Man, because the island does not have the infrastructure to respect & honour the trust of those who deposit in its banks. It is morally bankrupt because for all its protestations to the contrary its culture is still rooted in banking secrecy by which megga rich individuals & companies can evade their own social responsibilities to pay their fair share of tax in the places where it should be paid.

The IoM is morally bankrupt because it does not agree with the words of the UK Prime Minister when he said: "where there is unfairness we will act." It is morally bankrupt because it sees no reason to vouchsafe deposits in its banks. It is morally bankrupt because it uses high interest rates to suck in gullable people by telling them what the banks want them to know rather than what they should know about the risks to which they are exposed.

It is morally bankrupt because it has banking regulations that provide an outward cloak of responsibility & respectability whilst hiding the inner secrets of how business is done behind tightly closed doors that have locks but no keyholes. It is morally bankrupt because it has church leaders who do not stand up for righteousness in the financial affairs of the island. It is morally bankrupt because it conspires to increase its own wealth with scant regard for the poor of the world who lose out because of the gross injustices in the systems of taxation in the world's wealthiest nations, especially offshore jurisdictions.

Back in the 1980's the people of the Isle of Man rose up in angry protest at the way the island was being taken over by rich immigrants. Those wealthy invaders won the day and now 25 years on there is an acceptance of the island's status as a haven for rich people from the UK who relocate here to enjoy the benefits of living in a low tax regime.

There are clear signs that this is going to have to change, but instead of there being a revolt against the government it is more likely that the government will lead an orchestrated protest against the United Kingdom & the international community in the same way as it has ducked responsibility for the KSFIoM affair by blaming the bank's demise on Whitehall & Iceland.

The Isle of Man now stands between the devil of its own creation & the deep blue Irish Sea in which it will struggle to keep afloat. Tony Brown, Chief Minister, says the government has contingency plans. Now what sort of lifejackets will they be ?

Birds of a feather flock together on the Isle of Man

2009-10-12T23:49:00.005+01:00

Research on secrecy jurisdictions [findings here] has shown that the Isle of Man is one of 60 international secrecy jurisdictions with a defined transparency score of only 17%.

Recently the Isle of Man & Oxford University hosted a conference of financial personnel from 24 of the world's smallest nations. The Isle of Man was upholding itself as 'top of the form' hence well qualified to come to the front of the class to lecture & tutor the rest of the boys & girls on good financial governance. Guess what? 11 of these countries were in the list of 60 secrecy jurisdictions, and they made up 48% of the total of 24 attending the conference.

The small nations in the list of secrecy jurisdictions attending were:
Antigua & Barbuda, Barbados, Belize, Cook Islands, Maldives, Marshall Islands, Mauritius, St Kitts and Nevis, St Lucia, St Vincent & Grenadines, & Vanuatu.

Does that not sound rather like chums in the finance business meeting together to share notes on how best to make money out of operating as offshore finance centres? Is it not rather a case of 'birds of a feather flocking together?'

I found no evidence that any of the 24 small nations could hang their heads in shame by matching the record of the IoM's 3 failed banks, & no record that any of them had lost the savings of over 10,000 depositors during the previous 12 months.

John Aspden, Chief of the FSC, said last week that the loss suffered by Kaupthing bank depositors had nothing to do with wrongdoing on the Isle of Man. Who is he kidding? How arrogantly proud he stood to lecture on the jurisprudence of financial regulation on the Isle of Man, whilst thousands of depositors still waited to be paid compensation for his failure to vouchsafe their savings.

John Aspden's days are numbered.

Gone are the days of trust when an Englisman's word was his bond.

2009-10-11T10:40:00.001+01:00

I reproduce hereunder the words of a dispossessed Kaupthing depositor which sums up well the feelings of expats everywhere whose trust in the Isle of Man has been not only betrayed but ridiculed as though that were not a valid basis for putting one's life savings on deposit in a bank on the Isle of Man.

"No matter where you save (not invest) your money, be it offshore in the British Islands, or even in Timbuktu, permission is not given for others to purloin, take, squander or steal your hard-earned money - and that applies whether you are an immigrant or an expat.....

When you have been expatriate for many years and have built a long-term rapport with your bank or building society, it is not felt necessary to continually check up on them, similarly, when that reputable building society [the Derbyshore] tells you that they are moving the business on to another reputable company and they strongly recommend that you give that company [KSFIoM] your continued support, there are many of us from an era when an Englishman's word was true and we would not believe other than things were being said honestly for the benefit of all involved.

That type of thinking seems incredibly naive and foolish now, especially when after 16 years of dedicated saving, my £397,000 has disappeared into another bank in the UK [that went bust] and I will be lucky to see even 1/2 of it back - and then it will be too late.

So you see, there are people out there like us who just moved temporarily overseas because they chased jobs or adventure, that worked hard, but were not that financially astute. Had we been, we'd have probably been a lot more adventurous with our money then just saving it in a boring bank - but we're that sort of people I think: those that don't risk their life-savings in anything dodgy, but really believed that putting it in a bank was the safest thing to do. Now we've been proven to be inadequate fools, and people have taken advantage of our situation of being spread all around the globe with no representation; no vote; and no power to do anything other than appeal through the press.

Doing that of course brings the risk of others having a dig and a bash at us - and maybe we deserve to be labelled as foolish - but we didn't act maliciously towards others, nor take them to task for being inadequate in one part of their lives; we merely expected that those persons charged with looking after the finances of their country was to properly do the job they get so highly paid for and look after the interests of those who are not so clever in this department. They didn't do their job, they let us down and they let their country down, they all turned a blind eye until it was too late, now the unsophisticated expat depositors - working or retired - carry this huge loss."

Monkey business on the Isle of Man

2009-10-10T10:10:00.000+01:00

In a comment in response to a letter in the Manx Herald here International Publicity Inc said:
WARNING: MONKEY BUSINESS GOING ON - NEVER BANK ON THE ISLE OF MAN

Well here's a tale of monkey business that explains how the financial industry conspires to rip off you & me into believing that it is there for us.

Back in 2008 a man named Bond appeared in a jungle village & and announced to the villagers that he would buy monkeys for £10 each.

The villagers rushed into the forest and started catching them. Bond bought thousands at £10 each, but as the supply started to diminish, the villagers stopped their efforts, feeling they had enough lolly. So as an incentive Bond announced that he would now pay £20 per monkey.

This renewed the efforts of the villagers and they started catching monkeys again. Soon the supply diminished even further and the villagers decided they had had enough of this hard work.

But Bond increased the reward to £25 each, so into the depths of the jungle they went until the supply of monkeys became so small that it was an effort find a single monkey, let alone catch it!

So now Bond announced that he would buy monkeys at £50! However, because he had to go to the City on business, he said that his assistant, Stock, would now buy on his behalf.

In the absence of Bond , Stock told the villagers: 'Look at this big cage - full of all the monkeys Bond has collected. I will sell them to you at £35 each, and when Bond returns from the City, you can sell them to him for £50 each.'

The villagers scraped together all their hard-earned, lifetime savings and bought all the monkeys.

They never saw Bond or Stock again - only monkeys everywhere...

The world's jungles are not just on the equator, they are wherever there is an offshore financial centre. They take good care of the megga rich (hiding their wealth in the likes of 'shell' accounts)but treat the rest of us like those villagers in this story.

The Isle of Man is an offshore financial centre that research has shown to be only 17% transparent in the way it does monkey business.

When did a judge ever give a verdict before hearing a case?

2009-10-09T00:51:00.001+01:00

John Aspden, Chief of the IoM Financial Supervision Commission, spoke these smug words on Manx Radio yesterday: "lets be realistic the bank did not collapse because of any wrong doing at this end". Predictably he puts all the blame somewhere else other than the Isle of Man.

Mr.Aspden can be likened to a judge who gives a verdict before hearing the evidence in a case, except that judges would not dream of doing what Mr.Aspden does with such alacrity.

The Isle of Man government dared not allow this investigation to be conducted by an independent body because such a body would have wanted to view the facts objectively & openly, and would have reached a decision based on the evidence and not on the need to have a predetermined outcome as a political expedient to save the sinking reputation of the Isle of Man.

The overwhelming evidence about to be put to the Select Committee will make it clear that Mr. Aspden is deluding himself. In the light of that evidence it is going to have to do some clever mental gymnastics to make their findings fit Mr.Aspden's absurd claim.

Pandora's Box has been well & truly opened on the Isle of Man

2009-10-08T10:19:00.002+01:00

Tax Research org.uk has published here a comprehensive piece of research into 60 international financial jurisdictions which exposes them as secret tax havens. The Isle of Man is one of them.

The evidence [pdf file here] shows that: "the Isle of Man is a long way from offering financial transparency. If it is to play a full part in the modern financial community and wishes to impede and deter illicit financial flows, including flows originating from tax evasion, aggressive tax avoidance practices, corrupt practices and criminal activities it should take action on the points noted where it falls short of acceptable international standards"

All the government's propaganda efforts & waste of public money to hoodwink the world into believeing that it is transparent & squeaky clean has come to naught.

Pandora's Box has been well & truly opened on the Isle of Man - & there's more to come. Watch this space. In the meantime don't bank on the Isle of Man to be anything but economical with the truth when it claims that it is not a secrecy jurisdiciton.

When banks are morally bankrupt

2009-10-05T12:19:00.003+01:00

In the blog 'Cynical Tendency' there is a post (read here) about how secret jurisdictions may try to use the law to silence those who seek to reveal the truth about the jiggery-pokery that goes on behind closed doors in the financial world.

We speculate like this because we suspect jiggery-pokery is at the heart of financial life in the dark recesses of the financial world, especially the offshore financial centres. From the hidden heart of these places springs forth the love of money that is the root of all evil.

Without whistleblowers the man in the street will never know the truth about what goes on right under his nose. But alas! a potential whistleblower only knows a small part of a large system that thrives & spreads like a pernicious cancer in the financial world.

The dark secrets of offshore financial mechanisms is closely guarded by a select few who ensure that no whistleblower could ever reveal anything of any consequence that would lead to a reform of this morally bankrupt business.

The evidence of corruption now surfacing in Iceland needs an army of forensic accountants to sort it out. Sadly they will only get so far in their investigations because they have no financial 'enigma machine' that will break the code necessary to reveal just how far the tentacles of corrupt practices spread throughout the financial web across the globe.

Only the godfathers of it all could reveal all, but they would have no reward for doing so as they have sold their soul to the devil to gain riches that will buy them anything that they would need - except, of course, a place in heaven.

Offshore financial centres can not survive without money. Starved of money they would not last long. Banks never tell prospective customers what they want to know in order that they are better able to make a judgement as to whether their money would be safe in their hands. Banks only tell potential depositors what the banks want them to know.

Dispossessed depositors of the failed Kaupthing IoM bank have mounted a video campaign on Youtube.com under the title: "DON'T BANK ON THE ISLE OF MAN" as itcould seriously ruin your wealth.

Let's hope that they might succeed at removing the need for any of us to have to speculate further about what evil deeds might be cooked up behind closed doors in a financial world that only cares about your money and not you.

PWC & KPMG under police investigation in Iceland

2009-10-02T11:39:00.003+01:00

The Telegraph reports today (here) that Police have raided the offices of KPMG and PricewaterhouseCoopers (PwC) in Reykjavik, seizing documents and computer data as part of an investigation into alleged criminal activity at three collapsed Icelandic banks.

These two companies are employed by the Isle of Man. PWC is involved as liquidator of KSFIoM and KPMG is involved in the management of the Depositors Compensation Scheme. They are 2 of the top 4 international auditing companies & their services do not come cheap as the dispossessed depositors have found out to their cost. To those who are the victims of the failed Kaupthing bank these two companies are despised more than traffic wardens & bent coppers.

Why should this be so? Because as the Chairman of KPMG UK says: "Our vision is simply stated to turn knowledge into value for the benefit of our clients.." It is the depositors who are having to pay the cost.

These companies operate in the world of money like vultures scavanging off the carcass of companies that have gone bust, and they do so at the expense of hapless customers who are owed money but end up being left with the bare bones.

No doubt PWC & KPMG operating on the IoM will cry: "we are squeaky clean." Kaupthing depositors sure hope that they are, though KPMG haven't exactly shown themselves to be competent in the way they have handled the DCS payments.

Gordon Brown: "Not one British saver lost a penny"

2009-09-30T09:31:00.002+01:00

In his keynote address to the Labour Party Conference Gordon Brown said those very words: "Not one British saver lost a penny" in the financial tsunami that hit the UK in 2008. Excuse me Gordon but your speech writer had forgotten to put in the words: "except for the thousands of British expat savers who lost everything on the Isle of Man on 9 October 2008."

To compound this piece of being economical with the truth Gordon Brown went on to say: "every government across Europe chose to act", but he forgot to insert the damning words: "except the IoM government"

In response Lorraine, a dispossessed KSFIoM depositor,says:

- I am British
- I have always lived in Britain
- I was educated in Britain
- I have always worked in Britain
- I have always paid tax in Britain
- I deposited in KSFIOM on the advice of my British bank & British IFA
- I believed the British newspapers/Government/Regulatory Bodies that
the bank was safe
- I signed for withholding tax on this deposit
- I have lost my money by trusting Kaupthing IoM

Then Gordon Brown talked about 'putting morality into the market'. The PM needs first to put morality back into his government, the Treasury & the Ministry of Justice that has responsibility for the IoM as a Crown dependency.

What about Tony Brown? Is he going to do put morality into his government & the offshore fiancial institutions that keep the IoM economy alive? I guess not, but until he does those who were hoodwinked will go on telling the people of the world: "DON'T BANK ON THE ISLE OF MAN - it could ruin your wealth."

The blind set out to lead the blind on the Isle of Man

2009-09-26T10:08:00.008+01:00

Recently government officials from 24 small nations visited the Isle of Man as part of the Small Countries Financial Management Programme. Senior officials of central banks, finance ministries and regulatory bodies took part in a two-week executive education programme designed and run by Oxford University's Saïd Business School.

A number of Isle of Man experts took part in the education sessions including John Aspden, Financial Supervision Commission (FSC) chief executive, Sir Miles Walker, the Isle of Man's first chief minister, John Cashen, deputy chairman of the FSC and John Corlett QC, Attorney General.

Mr Cullen, who lectures at Oxford University's Saïd Business School and is a commissioner with the FSC, also took part in the educational sessions.

He said that having individuals with a wealth of knowledge and experience about the Isle of Man's development as an international financial centre was particularly interesting to delegates from developing nations.

So now we see the IoM setting itself up as an authority on how a small nation should best get its financial affairs, budget, banking regulation and compensation scheme in order. Extraordinary that this offshore centre that has a history of 3 failed banks on its hands, no bank of last resort, a seriously flawed depositor compensation scheme, & a Financial Supervision Commission that gave credibility to a worthless parental bank guarantee, should consider itself to be the best small nation to tell others how best to sort themselves out.

It is even more incredible that amongst those who lectured these delegates were the very people who were the architects of the downfall of Kaupthing IoM, one of the biggest cockups in banking history. Speaking with authority were Cashen (Director of the failed Kaupthing bank and Deputy of the FSC), and Aspden the chief of the FSC who backed him in his decision that brought down the bank.

Many look forward to seeing the full report of this expensive jamboree, but if such a report is published it is doubtful that it will be put in the public domain. Transparency on the IoM does not extend to that sort of publicity.

This event was one where figuratively the blind set out to lead the blind. The IoM refuses to do justice to thousands from around the world who lost their life savings on the Isle of Man, so it has no moral authority or credibility to lecture other small nations on how best to run their affairs.

Expats & others throughout the world are being warned: DON'T BANK ON THE ISLE OF MAN - there's now 3 pages of Google devoted to that topic & 30 videos on Youtube.com.
View here

The skeletons in the IoM cupboard

2009-09-22T21:15:00.006+01:00

The Chief of the Treasury says that the collapse of KSKioM was a "one-off".
It wasn’t.

In June 1982 the IoM Savings & Investment Bank (SIB) went into liquidation. Many of the 3000 depositors lost their life savings & their lives were ruined.

During the next 23 years there were countless legal actions to recover money lent out. Liquidators had to contend with broken pledges and bounced cheques, and spent years pursuing an allegation about millions of pounds of 'concealed' assets which led to them recovering just £225,000 from one of the bank's debtors. The paper chase took in the British Virgin Islands and Malta, among other locations.

After 23 years the liquidation was brought to a close after liquidators fees & court costs had soaked up most of the recovered assets. Depositors were left getting just 29p for every Pound they had deposited with the bank.

Then in 1991 another IoM bank went to the wall when the IoM Branch of Bank of Credit and Commerce International (BCCI) closed its doors. The depositors with BCCI were the first to receive any compensation through the IoM Depositors' Compensation Scheme. 10 years later the IoM government reported that depositors had received 60%.

An international financial accountant who has great experience in liquidation scenarios has offered the view that, though not familiar with the specific detail of the KSFIoM situation, over a six year period the total costs of the KSFIoM liquidation could be of such an order that depositors will be lucky to get 40%. This would be outrageous, and the depositors who have not received full compensation under the DCS will not rest until all that has been lost is fully restored to them.
That would be a 'worse scenario', but anything less than 70% net recovery in liquidation would be a bitter pill to have to swallow.

Certainly in terms of the worst scenario depositors are not going to sit around for 6 years to be then told that recovered net assets are 40% on account of the rest having been swollowed up in fees & other costs.

The Depositors' Action Group will step up its message: DON'T BANK ON THE ISLE OF MAN until justice is done by all deposits being restored 100% as they were in the UK & throughout Europe.

If the government choses to go on ignoring the dispossessed depositors just claim then it will be the skeleton of the Isle of Man itself that will end up in the cupboard.

It's time to address moral failures in the Isle of Man

2009-09-19T13:45:00.008+01:00

On 18 September Paul Myners, Financial Services Secretary, addressed the Financial Times Global Finance Forum on the topic: Developing a new financial architecture: lessons learned from the crisis

In it he said that the fundamental role of any country’s financial sector is to manage risk. "Risks have become increasingly complex, opaque and inter-linked; and it is now clear that the assessment and management of risk by financial institutions failed....But we also learned that that power of the financial system was not matched by responsibility for its actions, creating an accountability gap that has had to be filled by taxpayers across the globe."

That is what happened when the directors of KSFIoM transferred half the bank's liquid assets to KSFUK which were then lost in administration. The directors failed to exercise due diligence when confronted with the known risks of the Kaupthing hf scenario, and the inherent risks to which its sister banks were exposed on account of it. Today they still refuse to accept any responsibility for their crass decision. They refuse to give account - or offer an apology - to the depositors who lost everything through their action.

In advance of its own Select Committee of Inquiry the IoM government has been quick to pronounce the directors, and the FSC that supported them, innocent of any culpability. Blame is placed at the door of others in order that the directors & the FSC could be excused from being held accountable.

Mayners went on to say: "Corporate leaders in the global financial sector have begun to talk about addressing moral failures and that is to be welcomed... it is time to start hearing how they intend to drive moral reform within their institutions."

Now that is an interesting concept that seems to be beyond the current thinking of the IoM government, the FSC and the finance houses of this offshore financial centre. Any notion that they have a moral responsibility to uphold the trust that depositors placed in a bank on this island does not feature in the values they hold.

It is time that we started to hear how the IoM government intends to drive moral reform within itself & its institutions. Until it does people will not trust it. Until then the message to the people of the world is: DON'T BANK ON THE ISLE OF MAN as it is an offshore centre that has no moral integrity. It has no interest in people, only their money.

The Isle of Man can only offer a 'piggy bank' service up to £20k

2009-09-18T10:32:00.009+01:00

I have accepted an anonymous comment to the post 'Depositing in the IoM could seriously damage your wealth'. I respond to it hereunder.

The IoM boasts itself as a world leader in the offshore financial market, having a triple AAA credit rating & a budget surplus that is required by statute. Nevertheless it does not have the financial infrastructure in the form of a bank of last resort or a corporate commitment by its banks to underwrite the liquidity of one of its members in the event of there being a run on it.

The IoM boasts having a strong regulatory framework underpinning the conduct of banking business on the island. The government says that KSFIOM was "a one-off" incident (though there were 2 previous 'one-offs'). That being the case the government & the banks should have great confidence in the stability of the banking sector to withstand the chill of a recession, and had there been a mechanism in place to cope with the sort of crisis that hit KSFIoM - a crisis that the FSC was party to & capable of handling rather than simply resorting to withdrawing the licence - KSFIoM might still be operating today. Certainly 11,000 people would not have lost everything on 9 October 2008.

It is not good enough to simply say that the IoM with a population of 80,000 can not have a bank of last resort. You can not have your cake & eat it. If the IoM is to be a leading trustworthy offshore financial centre then it has got to be able to offer depositors from around the world the assurance that their life savings are safe on the island. This is a Crown dependency & if necessary it should have the backing of the Bank of England, and preferably have its banks regulated by the UK.

Hitherto the IoM had no problem in allowing people with £50k ++ to deposit on the island. Now post KSFIoM there is a problem, & the seriously flawed compensation scheme will only cover deposits up to £20k from October 2009. On present form - unlike the UK FSCS - it will be up to 12 months before compensation is paid.

Depositing in the IoM is no longer the best option for anyone looking to deposit a substantial sum from the sale of a house, an inheritance or a life's accumulated savings designed for one's 'golden years'.

On its own admission from October the IoM can now only operate a 'piggy bank' deposit service up to £20k. That in itself is good enough reason why millions of people around the world would not consider depositing on the Isle of Man. There are at least 15 other reasons that readily come to mind for not doing so.

The IMF report is not a clean bill of health for the IoM

2009-09-15T08:32:00.006+01:00

The IMF has just released its report on its team's visit to the Isle of Man in September 2008. The visit preceeded the collapse of the Kaupthing IoM bank so makes no reference to it.

Allen Bell, Treasury Minister, said way back last Autumn that the IMF report was imminent. Then why has it taken 12 months to report on what was a comparitively simple task undertaken way back last September? From reading the report it is self evident that it was deliberately delayed to take account of (1) the changes made by the IoM Financial Supervision Commission to the Banking Regulations & the Rule Book, (changes made as a direct consequence of the failure of KSFIoM), & (2) Basel II's review & update of its own protocol which was not completed until July 2009.

In other words the report was not comparing the IoM banking regulations of September 2008 with the Basel protocol at that time, but was reporting on the regulations relative to Basel II as they are today. Hence it is a report based on a 'stable cleaned & the door shut after the horse had bolted' after KSFIoM collapsed.

Invevitably Tony Brown, Chief Minister, puts a spin on the findings of the report, making it look as though the Isle of Man has a clean bill of health & is a safe place on which to deposit one's life savings. It isn't. The report only addresses the standard of banking regulation relative to the standards laid down by the Basel II protocol. That is a long way from saying that the IMF endorses the Isle of Man as a risk free place for depositing one's life savings.

Indeed the report says that the IoM is not risk free - that its banks rely heavily on their onshore banks if they get into trouble and that in itself is not a guarantee of security. It also considers the Depositors Compensation Scheme is unsound.

The plans for the Titanic had stamped all over them unsinkable, but it sank! The IoM is already holed by th collapse of KSFIoM and is sinking. The IoM can not borrow from the IMF but the IMF could offer the UK government a loan to enable the IoM government to meet the just demands of the Kaupthing depositors to have all their lost savings returned to them. Why doesn't it?

Best advice at the present time is: DON'T BANK ON THE ISLE OF MAN as there are significant risks involved in doing so.

IMF Report [PDF format]: here

Is Foot about to put the boot in for the Isle of Man?

2009-09-14T09:21:00.003+01:00

Michael Foot is leading a UK government inquiry into the relationship beween the UK & its Crown dependencies. Shortly he will be setting out a number of options to government ministers in the report in the face of increasing concern in Whitehall over exactly what is going on with respect to Britain's Crown dependencies.

A number of British overseas territories are facing serious problems which could get worse. In the event of further economic deterioration, they could become failed states. Leaked information indicates that the government may need to make provision for the financial failure of British tax havens. The failure of a major tax haven could cost UK taxpayers billions of pounds.

The Isle of Man, Jersey, Guernsey are the UK's closest Crown dependencies. The 14 overseas jurisdictions that come under the Crown include Bermuda, the Cayman Islands, Gibraltar and the British Virgin Islands. Collectively these tax havens tie up trillions of dollars & Sterling, which constitute a strangle hold on the world's economy.

Together they drain the UK economy of an estimated £25bn annually through their role in aggressive tax avoidance and evasion involving a whole plethora of financial jiggerypokery to make millions of already ultra-wealthy people stinking rich whilst billions around the world starve.

The IoM government relies heavily on this financial 'trade' to maintain its budget in a state of surplus. It admits that the thousands of ordinary expats who deposit their life savings on the IoM are not tax dodgers and that their contribution to the economy is relatively insignificant. So the government puts out propaganda that it isn't concerned about the campaign of the dispossessed Kaupthing depositors: 'DON'T BANK ON THE ISLE OF MAN'. The banks themselves might have a very different view. So might the credit rating agencies, despite the fact that they are very much in the pocket of the IoM government.

So Foot may well be putting in a heavy boot when he reports on his findings in relation to the three-legged Isle of Man.

Here's a short video from the depositors' campaign on Youtube.com:- 'Dallas comes to Douglas'

Manx Alchemy - how the IoM turned gold into sand

2009-09-13T14:54:00.005+01:00

Nixi, a dispossessed KSFIoM depositor, was lucky in the draw for a one hour slot on the 4th. plinth in Trafalgar Square, London. He was unlucky in so far that it was at the early hour of 7am! Nevertheless a large number of depositors from the UK, the IoM, France, Spain & Italy & Brazil joined him with banners advising people DON'T BANK ON THE ISLE OF MAN as to do so involved risks that could seriously ruin their wealth & damage their health.
To view click here

Nixi has also done a brilliant video Manx Alchemy posted on www.youtube.com where he sings how the Isle of Man turned gold into sand & ruined the lives of 10,000 depositors. To view click here

The depositors are telling the IoM government loud & clear that they are not going away until they have had every penny of their savings restored to them like those who lost everything in the UK & the rest of Europe when the banking crisis started to take its toll last autumn. They have the backing of a number of major international financial organisations in their fight for justice, including the Independent Financial Advisers online site.

Isle of Man continues to be scheming, deceitful, contemptuous & hypocritical

2009-09-09T10:13:00.009+01:00

Depositors were told that payments under the compensation scheme or liquidation would be made 4th. September. Allen Bell, Treasury Minister, has told the media that everything was on target for a rapid repayment under the scheme of all deposits up to £50k, with those up to £201,613 receiving £50k under the scheme. Now the scheme manager is complaining that he has been inundated with mail; his staff can't cope so there is going to be delay in getting payments to all claimants under the DCS. Guess what? yes! he blames depositors!

This is a total disgrace. The scheme manager has failed to provide the communication that was promised between himself & the depositors. He has a dedicated website but doesn't know how to use it. What direct communication there has been with depositors has been insensitive & often incomprehensible. The scheme manager seems to be totally blind to the terrible stress that he is creating. He might well have problems but he isn't suffering the terrible deprivation that the depositors have been enduring, & their desperate desire to get something of their money back after 11 months of sheer hell.

This incredible beurocratic shambles just reinforces the perception made in this blog back on 11 June that the Isle of Man continues to be scheming, deceitful, contemptuous & hypocritical.

If anyone had any doubts hitherto about the wisdom of depositing offshore here, the answer is clear: DONT BANK ON THE ISLE OF MAN as it could seriously damage your wealth and ruin your health at the same time.

Depositing on the Isle of Man could seriously damage your wealth

2009-09-06T14:30:00.008+01:00

John Aspden, Chief of the IoM Financial Supervision Commission, counsels that anyone depositing in the IoM is taking a risk in much the same way as if their deposit were an investment. His advice now is not to put more than £50,000 in any one bank on the IoM. Why not? The government is constantly trumpeting about how good is its financial services industry, and how well placed it is to ride the waves caused by the international banking crisis and the recession. if it is so good why suggest that it is risky to deposit more than £50k on the island?

If it is rash to place more than £50k in an IoM bank then why did Mr.Aspden sanction the directors of KSFIoM putting £532million of the bank's assets into one bank, especially knowing that the bank in question (Kaupthing UK) was one of the riskiest of banks to put the lifeblood of KSFIoM? The predictable event of Kaupthing UK going into administration cut of the flow of blood to the very heart of KSFIoM causing a massive heart attack. There was no life support machine in the form of a bank of last resort to resuscitate the patient.

Offshore centres are suddenly finding themselves with their backs to the wall. If the Cayman Isles - the Caribbean 'daddy' of them all - is in dire straights what hope is there for the Isle of Man? The island has nothing like the 3 trillion dollars that Cayman has in its finance houses.

Best advice is not to put any money on deposit on the Isle of Man as it could seriously damage your wealth.

The primary reasons for the failure of Kaupthing IoM

2009-09-03T06:52:00.005+01:00

It doesn't really need a Tynwald Select Committee to inquire into the reasons for the collapse of the Kaupthing bank. There was no member of staff shouting through the closed door on 8 October 2008: "we have stopped trading but no one knows why".

The bank had its licence withdrawn by the Financial Supervision Commission, the same body that had backed the transfer of over half of the bank's assets to Kaupthing UK which went into receivership in October 2008. Having lost these assets Kaupthing IoM ceased to have liquidity to continue trading.

The IoM government has already announced that neither the directors nor the FSC did anything wrong. Then why have not the directors made a statement to the depositors who lost all when the bank went bust? And why did the FSC seek & obtain for itself immunity from prosecution?

The directors were able to transfer the assets because the IoM banking regulations permitted such a transfer to a bank within the same banking group. In normal & stable circumstances this could have been determined to be an appropriate decision. However, neither the circumstances nor the reasons were normal.

The money had been upstreamed to the parent bank Kaupthing hf (Iceland) which both the FSC & the UK Financial Services Authority knew for some time was a bank in trouble. For this reason it was decided that the money would be more secure if transferred to Kaupthing UK.

Common sense alone would have told the directors & the FSC that to put over half the assets entirely unprotected into a sister bank of a failing parent was asking for trouble. There was an umbilical cord between the two and if the 'mother' bank went down it would invevitably take down the offspring. It did. Every Kaupthing bank in Europe went bellyup.

So whilst the transfer of the assets were not made contrary to the IoM banking regulations, the decision to do what was done was clearly a failure of the exercise of due diligence required in banking practice to ensure that this was the right decision having regard not only to the specific context of the looming Kaupthing hf crisis, but also to the context of the interntional financial crisis that had already errupted.

It will not be sufficient for the Select Committee to simply pronounce: "there was no regulatory failure". The directors made a decision, backed by the FSC, to transfer the assets to KSFUK and the committee must decide whether that decision was one made with due dilligence having regard to the context in which it was made.

Taxing times lay ahead for the Isle of Man

2009-08-30T23:51:00.003+01:00

Mr.Steve Rodan, Speaker of the IoM parliament, is not quite right when he recently said: : “every pound spent here is raised here”. The IoM financial services industry earns very little from the IoM. The banks are primarily places for taking deposits that are then upstreamed to an onshore parent bank to be put to work to make money, & the IoM simply taxes banks to raise revenue for its budget.

Mr.Rodan went on to say: ‘By statute our Finance Minister is obliged to balance for a budget surplus – this is done consistently; with no external borrowing, and rates of taxation which actually encourage private enterprise and wealth creation, yet this little nation can still point to first-class publicly financed services in health, education and social security'.

He speaks as though the IoM has a self sufficient economy. Clearly it hasn’t.
It has an economy highly dependent on its financial services industry but it has no bank of last resort. It is out of step with the UK & the rest of Europe. As a Crown dependency it should be required to conform to international agreements in respect of the management of financial affairs that affect us all. Hopefully two inquiries in the UK (Foot & the judicial commission) will expose the weaknesses in the IoM, including those that make depositing in the IoM a risky business.

The Kaupthing fiasco illustrates well that the IoM is not capable of dealing with a banking crisis. Expats & others are now finding out that it is not as secure a place to deposit their life savings as it is trumpt up to be in the glossy brochures & fishing expeditions undertaken by banks & other finance houses.

This and the increasing impetus by the OECD & others to expose those economies that rely significantly on tax evasion and avoidance to bolster them is going to force the IoM to rethink its whole approach to the way it operates as an offshore financial centre. However it is unlikely that principles of morality & ethics will be central features of the exercise. It looks as though taxing times lay ahead for the Isle of Man

It's time to open Pandora's box in respect of Kaupthing UK

2009-08-28T21:06:00.003+01:00

Prior to October 2008 KSFIoM directors transferred over half the bank’s assets from Kaupthing hf (Iceland) to KSFUK where they were subsequently lost in administration. The High Court making the administration order did so with an accompanying sealed court order.

Knowing what we do now following the leaks concerning Kaupthing hf it is time these sealed orders were opened so that all can see what possible machinations there may be in respect of the KSFUK’s accounts. We already know from the receiver that they are complex & difficult to unravel which is not surprising as he says investigations extend to the Cayman Islands.

Is it possible that there may have been coverup in respect of the KSFIoM bank immediately prior to that bank losing its licence in October 2008? There’s still too much secrecy in this dreadful Kaupthing affair. It is time that Pandora’s box be opened!

See Wikileaks on 'What ugly secrets are waiting to be exposed?' : here

Crows nest cry from a sinking ship

2009-08-27T08:30:00.007+01:00

Ref: article in IoMToday 27 August here . Allen Bell (IoM Finance Minister) is good at 'smoke & mirrors' statements, putting a bright 'spin' sparkle on a badly tarnished image. The IoM government is taking 22% of KSFIoM assets for the compensation scheme but making it it sound as though it is doing depositors a favour. It isn't 'compensation' anyway. It is just a statutory government advance up to £50,000 in lieu of the government recovering most of it from the realised assets of the bank. Even the levy on the banks for the compensation fund is to be refunded. In other words the dispossessed depositors are paying for their 'compensation'from what is left from the ashes of the bank.

Depositors with over £50k lost will not get a penny more until the IoM government has recoved from the assets what it is paying out to them in 'compensation'. Apart from late delivered emergency survival payments depositors are 11 months down a road called 'ruin' before they are seeing a penny of their lost life savings.

The fact remains the compensation scheme is seriously flawed and now not relied upon by the banks though they still peddle it as 'security' in their glossy fishing publicity. In reality many are having to rely on their nationalised onshore banks as fallback in the event of them getting into serious difficulties. Without this dependency on the parent bank the deposit taking business would be finished on the IoM. The ship is sinking anyway.

The message to the world is simple: DON'T BANK ON THE ISLE OF MAN as the risks of doing so are unacceptable. That message is going out through videos on www.youtube.com and through Twitter & Facebook. All the facts & relevant links can be found here http://www.kaupthingiom-dag.co.uk

Not so squeeky clean after all

2009-08-24T10:30:00.002+01:00

On its blog Tax Research UK comments on an article published in the Times that the Nationwide Building Society did not have information on its offshore account holders. read here

The Foot inquiry into the relationship between the UK & the Crown dependencies needs to take serious note of what dispossessed Kaupthing depositors are saying in its evidence here. I doubt if it will.

It's morally wrong to gain from the loss of others

2009-08-23T09:22:00.006+01:00

Manx Radio reports HERE on a book being published on the Kaupthing fiasco by the former bank boss of Kaupthing hf (Iceland)

It is morally wrong for someone who was the architect of the collapse of a bank - and a major player in the financial crisis that subsequently hit Iceland - to gain from his gross incompetence that has wrecked the lives of millions of people. Rather than financially gain from his greed he should lose his liberty behind bars.

The KSFIoM depositors will not tolerate this travesty of injustice. They don't want compensation (which they are paying for anyway through the bank's liquidation) -- they want ALL their money back.

Until they do they will say with every justification what they are saying on Youtube: "DONT BANK ON THE ISLE OF MAN" as there are risks in doing so as the Chief of the FSC has rightly pointed out. He wants people contemplating depositing on the Isle of Man to satisfy themselves whether it is safe to do so. Kaupthing depositors are helping them to make an informed judgement based on their own experience a research.

It's all here on the site: http://www.kaupthingiom-dag.co.uk including the links to 19 videos on www.youtube.com saying: "DON'T BANK ON THE ISLE OF MAN"

This is not a campaign of revenge

2009-08-20T11:42:00.004+01:00

DONT BANK ON THE ISLE OF MAN is not a campaign of revenge dreamt up by angry depositors. It backs the evidence that the IoM does not have the proper infrastructure to operate an offshore financial services industry, and expats & other around the world need to know the facts.

As the Chief of its Financial Supervision Commission says himself, deposits in the IoM bear the same sort of risks as investments and it is up to depositors to satisfy themselves that their money is safe in the IoM. Dispossessed depositors are helping potential depositors to make well informed decisions as they don't want others to endure the hell that they have had to put up with for 11 months.

No one need worry that the campaign will bring down the IoM economy. That is not the objective. If it starts to look even remotely that it is having such an impact it will be absolutely certain that the IoM government will do something before it starts to lose it precious AAA credit rating. The Treasury has stated that income from deposits represent only a small part of the IoM's budget. If that is not true then the best thing it can do right now is get the Kaupthing fiasco out of its hair by finding the means to restore depositors every penny of what they have lost.

The UK Treasury Select Committee recommended that the IoM government should meet with the UK government to resolve the issue. I have seen no evidence that such a meeting has taken place. Perhaps it is proud independence that stops little IoM going cap in hand to big brother UK to find a political solution. If that is the case then we know that 'pride comes before a fall'.

Don't bank on the Isle of Man on Youtube

2009-08-18T06:41:00.003+01:00

The Kaupthing expat depositors who have lost over £50,000 of their life savings are concerned that other people should be aware of the risks they face by depositing on the Isle of Man. They would not wish anyone else should experience the terrible life they have had since October 2008 when the bank lost its licence and closed its doors on them. Their money had been lost by the bank's directors when the directors made the grossly irresponsible decision (backed by the Financial Supervision Commission) to place unprotected over half the bank's assets into KSFUK which went into administration.

Consequently depositors are now posting videos on Youtube to warn people of the risk of banking on the Isle of Man. Their message is simple: DON'T BANK ON THE ISLE OF MAN. The videos may be viewed HERE

You can't bank on the Isle of Man to protect your money

2009-08-11T07:10:00.006+01:00

The UK Prime Minister has stated unequivocally that it was HM Government’s policy that all governments should vouchsafe savings and deposits. This has been accepted by the g20 nations & has now been endoresed by every jurisdiction throughout Europe except the Isle of Man. Why not ?

As a small Crown Dependency the Isle of Man should be compliant with the policy, but it does not have the wherewithal to embrace it as it has no bank of last resort.

However, the Isle of Man is required to be compliant with international agreements entered into by HM Government, & if necessary the Government could legislate to enforce compliance. But the Ministry of Justice does not recognise the injustice of the situation as it affects thousands of expat British taxpayers who had no option but to bank offshore because of UK anti-terrorsim legislation. Instead it ducks the issue by stating that the IoM is an independent jurisdiction which has chosen to deal with the KSFIoM debacle through its depositors' compensation scheme.

Nothwithstanding the position of the Ministry of Justice (supported by HM Treasury), the UK Treasury Select Committeee recommended that the two governments should get together to find a resolution to the Kaupthing problem. There is no evidence that this has happened. Why not?

The Isle of Man should not be selling itself as a secure offshore financial centre as it does not have the financial infrastructure to cope with a banking crisis. Instead it allows its Financial Supervision Commission to state that it is not responsible if a bank fails, and that it is the responsibility of depositors to accept that a deposit carries a risk in much the same way as does an investment, & that prospective depositors should satisfy themselves that their money is safe in the trust of an IoM bank.

This is absurd! What then is the point of having a Financial Supervision Commission? What is the point of a bank if ones money isn't safe in its trust? KSFIoM was considered by depositors as guaranteed SAFE, that is why many expats felt confident in putting on temporary deposit, for example, the proceeds of the sale of a house pending their return to the UK.

The Isle of Man is NOT a secure place on which to deposit one's life savings. Until the government can guarantee that it is the message is clear: DON'T BANK ON THE ISLE OF MAN as it could seriously damage your wealth. See video: http://bit.ly/NBiwC

manxforums.com censors Jim's first post!

2009-08-08T10:53:00.005+01:00

The post was 'Depositors do not have a quarrel with the people of the Isle of Man'. Some members of manxforums regularly break the Terms & Conditions of the use of the Forum, but it seems that when it comes to free speech on a topic that can only be welcomed by members, a moderator decided unilaterally to delete the post without any explanation for the reason for doing so. Furthermore I have been banned from posting on the Forum without me being notified as to the reason for this!
I have not contravened any of the Terms & Conditions of the Forum.

As I have posted elsewhere in this blog, 'democracy does not fit well on the Isle of Man'.

Depositors have no quarrel with the people of the IoM

2009-08-03T11:06:00.003+01:00

The exercise of democracy on the isle of Man is not one of its strongest virtues. Manx folk just want a quiet life to enjoy the prosperity that the world brings to its shores through deposits & investments. The dispossessed KSFIoM depositors are just an irritation to the government which claims that the effect of the loss of the bank has had no effect on the IoM economy and its AAA credit rating.

It is going to be in for a rude shock when it finds the world no longer considers this offshore centre a place on which they can bank with complete confidence.

The depositors have no quarrel with the people of the IoM; their gripe is directed at the directors & the FSC who failed to exercise due diligence in what they did that brought down the bank.

Manx folk need to wake up to the potential disaster that is going to affect the island's economy unless the government does the right & honourable thing to protect the well-being of the IoM, namely restore all deposits 100%

A Catalogue of Failures

2009-08-01T08:22:00.003+01:00

Evidence to the independent Review of the Crown Dependencies has been submitted on behalf of the Kaupthing IoM Depositors' Action Group. This has been distributed widely to a number of key organisations. The evidence supports every reason why potential depositors should heed the warning:

Don't Bank on the Isle of Man

The DAG's evidence may be read here

The real aims of the inquiry into the collapse of KSFIoM

2009-07-27T23:20:00.003+01:00

The Tynwald has chosen not to have an independent inquiry into the collapse of the Kaupthing bank. Why? Because it does not want the truth to come out. Why? Because it would be a deadly blow to the reputation of the Isle of Man as a trustworthy & competent offshore financial centre.

The word on the street is that it has already been decided that this inquiry should be a public relations exercise to project the IoM as having a vibrant & well regulated financial services industry. Clearly it can not do that if it has a frank & objective report, so we can expect to see a report that will be a whitewash in which the directors and the Financial Supervision Commission will be held not to blame for the demise of the bank.

This is the way politics work in the Isle of Man. The Treasury Minister speaks as though he is doing the depositors a big favour by saying that 75% of them will have their deposits restored by the end of September; that's just a few days short of 12 months since the bank closed its doors in October 2008.

Well, the reality is they would have had their deposits restored a long time ago if the Treasury hadn't introduced what turned out to be a hugely expensive cockup in proposing a Scheme of Arrangement whose primary aim was to look after the interests of the Isle of Man and not those of the depositors.

75% of depositors will get 'compensation' before the end of September but that still leaves 25% who will have to wait 6 years to get back what can be realised from the liquidation of the bank. Those depositors are very angry and will be saying to the world through Youtube & Twitter DON'T BANK ON THE ISLE OF MAN.

No independent inquiry into the collapse of the bank

2009-07-22T19:46:00.003+01:00

July 2009.....TYNWALD has voted unanimously to set up a select committee to investigate the causes of the collapse of the Island's Kaupthing Singer & Friedlander bank.

The committee will also examine the role of the Financial Supervision Commission in ensuring the KSF (IoM) bank was properly managed to protect depositors' funds and it will also consider the credibility of the government's depositor compensation scheme.

David Cannan (Michael) who tabled the motion calling for the setting up of the committee said this was an issue of accountability and the bank's collapse had to be investigated to reassure the people of the Island and our customers that we have a sound and responsible regulatory system in place.

He said: 'There must be no perception of whitewash or cover up. The Island must have the highest standards of integrity to ensure its reputation internally and internationally.'

The motion was carried unanimously as amended by Health and Social Security Minister Eddie Teare to require the select committee to report back to Tynwald by the March 2010 sitting. Juan Watterson (Rushen), John Houghton (Douglas North) and Eddie Lowey MLC were voted in as the committee's three members.

Clearly this important inquiry is not going to be independent as it should be. Such as it is it must be undertaken in public and must call on all affected parties to give evidence, especially the Depositors' Action Group. Finally its report must be made public.

inquiry must be done with transparency

2009-07-16T08:15:00.008+01:00

So the Tynwald is presently discussing having a Tynwald Select Committee to inquire into the collapse of the Kaupthing IoM bank.

'Transparency' is one of the keywords that the government uses as a hallmark of the way banking business is conducted on the IoM. Independent objective assesment would suggest that it is at best opaque and at worst still 'smoke & mirrors' with a lot of business done in secret hanky-panky.

The idea of a Tynwald Select Committee being the appropriate body to conduct such an important investigation as the collapse of one of its pillar banks is a nonsense. The thought that it might be conducted in private with its findings kept secret reeks of known guilt that needs to be covered up in order to protect the guilty parties & the tarnished reputation of the IoM.

To be transparent this Kaupthing inquiry should be conducted by an independent body, should be in public, should be open to evidence being given by victims of the collapse, and the findings should be made public. Anything proposals for an inquiry that falls short of these terms would be an outrage.

Why you can't bank on the Isle of Man

2009-07-12T09:01:00.004+01:00

"Trust is a relationship of reliance. Trust is a prediction of reliance on an action, based on what a party knows about the other party. Trust is a statement about what is otherwise unknown -- for example, because it is far away, cannot be verified, or is in the future." Wikipedia

Trust has become a big issue in British society. The sense of betrayal is widespread and becoming deep rooted in the minds of citizens. Events over the past 12 months have caused the Nation to mistrust the institutions of Parliament, the activities of Whitehall, the shenanigans of banks, the dubious operations of the City & questionable mechanisms of international finance.

It is the issue of the trustworthiness of banks that is probably of most concern to people, because if their hard earned money isn't in their pocket it is either under the matress or in a bank. That is the reason why the Prime Minister & the Chancellor have spoken & acted to try to reassure people that their money is safe irrespective of events that have caused people to think otherwise.

The big problem is that Tony Brown, Chief Minister of the Isle of Man - whose economy relies heavily on the island’s financial services industry - can not speak and act in the same way. Trust is not a concept that fits into the the way the IoM does business. Yes, every bank peddling for your money all shout "trust me" but the simple fact is you can not take them at their word. Why? because their word is not their bond, and the literature and hard sell tells you all the reasons why you should trust them with your money but does not tell you the risks of banking with them. For that you have to rely on what the crafty Chief of the FSC says, & if you do that then you will not put your trust in a bank on the Isle of Man.

"The Isle of Man failed KSFIOM depositors spectacularly"

2009-07-10T06:30:00.005+01:00

To give credit where it is due the editor of SHELTER OFFSHORE wrote a well-balanced piece in response to criticisms he received about the way the Isle of Man was being promoted as a good place to put one's money. He said:

Recently we ran several articles on the Isle of Man and its reputation as being one of the safest and best regulated offshore jurisdictions. The storm of emails that came back to me was quite overwhelming - more importantly they weren’t of the nature that I normally receive. These weren’t emails from millionaire expatriate investors who’d fallen a few percent short of the original projections, they were from very real people who had lost their entire life savings, retirement incomes and any chance of ever getting their money back. The victims were investors and depositors at Kaupthing Singer & Friedlander, Isle of Man (KSFIOM.) So why, when over 10,000 investors and depositors have lost so much while depending on the Isle of Man’s regulation and guarantees for security, am I still saying that the Isle of Man is a safe and recommended offshore jurisdiction?

There’s no point in beating about the bush - the Isle of Man failed KSFIOM investors and depositors spectacularly, and their failure to resolve the situation quickly has indeed damaged the Isle of Man’s (IOM) reputation as a safe offshore jurisdiction.

......... There’s actually a whole catalogue of blunders that resulted in KSFIOM investors and depositors losing their savings, the IOM is partly responsible but not entirely, you can find far more information at www.ksfiomdepositors.org a site specifically created for the victims of the collapse. I personally am equally disgusted at the way this particular situation has been handled, but I won’t leave the blame totally at the gates of the IOM government when the UK government and the FSA also played an active role.

The Isle of Man government do deserve to be criticised for what happened and should be held fully to account, but the fact is that the IOM is still one of the most responsive offshore jurisdictions.........

In the final analysis because of the significant dependence on its financial services industry the IoM can not afford to dismiss depositors simply by implementing its flawed compensation scheme.

No doubt the government believes KSFIOM was a 'one-off' casualty of the international financial crisis and it is tough luck that the depositors are colateral dammage. But that is not good enough. In response to the financial crisis all European governments acted swiftly to ensure that savings in banks in their jurisdiction were safe. The UK did this where necessary by nationalising failing banks and guaranteeing the savings of UK residents who put money into KSFUK & Icesave. The IoM government has not responded in like fashion. It is a Crown dependency so it should.

Full article : here

Why do readers of 'SHELTER OFFSHORE' hate the Isle of Man?

2009-07-08T08:11:00.006+01:00

The website SHELTER OFFSHORE has been inundated with complaints about the way it promotes the Isle of Man. It says: "But why do Shelter Offshore readers hate the Isle of Man so much? Are so many of them victims of the collapse of Kaupthing, Singer & Friedlander or are they victims of the misinformation that has been spread about the island ever since?

We decided we needed to set the record straight on the Isle of Man’s behalf. We don’t have a preference over offshore jurisdictions, but we do feel that the negative publicity the island has been suffering is actually unfair. Yes, Kaupthing, Singer & Friedlander collapsed and resultant concerns have not been handled swiftly, efficiently or comprehensively enough for some victims…however, that is only one part of the story......... we feel that the jurisdiction should be respected for what it has done and continues to do to maintain its reputation as a leading and reputable financial centre.

Well it would say that wouldn't it? It has a vested interest in making the Isle of man look attractive. But like an attractive new house on the market, what virtue does it have if it is built on hidden unsound foundations? The Isle of Man now has an economy heavily dependent on its financial sector, but though it has its symbolic three legs it does not have a bank of last resort to stand on. It is highly dependent not on its own inbuilt security to vouchsafe deposits but many of its banks are relying now on the security offered by their onshore parent banks. The Kaupthing debacle illustrated the weakness of this link when its Icelandic parent bank failed taking the parental guarantee with it.

So long as the Chief of its FSC publically acknowledges that deposits like investments carry a risk especially when the rate of interest offered is high, then no one in their right mind is going to put their money in the trust of the Isle of Man. It is not a question of 'hate' but of 'mistrust' from having been betrayed by what turned out to be a number of completely false promises of security.

The IoM government could exercise some moral integrity & show a keen sense of justice if it were to accept that the Kaupthing fisaco was a regrettable - & hopefully - isolated incident for which regulatory failure on the part of its FSC played a major part. In doing so it could see to it that no depositor would lose out as a consequence. But unfortunately on the Isle of Man politics comes before the people who put their trust in this bank.

SHELTER OFFSHORE would do depositors a real service if it had the integrity to stand in solidarity with those depositors who have been legally robbed of their life savings in an offshore centre that in its own mercenary self interests it is so keen to promote. Until it does it demonstrates for all to see that money & morality do not get on well in bed together.

Rough Justice in the Isle of Man

2009-07-06T09:50:00.008+01:00

Insult was added to injury when the Court judgement called upon the Company to pay the costs incurred by the DAG on account of the Treasury's SoA, when of course that meant the depositors will have to pay! On 3 February Tony Brown told the UK Treasury Select Committee that the IoM would deal with the KSFIOM affair by implementing its well tried DCS but he did not do this. Instead he was persuaded by the Treasury that the best interests of the IoM would be served by an alterative means of dealing with the problem, namely a Scheme of Arrangement. They could not even get the SoA right from the start which added significantly & unnecessarily to the DAG's costs on account of it.

The Depositors' Action Group did not ask for this SoA and was only prepared to accept it if it offered better terms than would be available through liquidation of the bank & the compensation scheme. Though the Treasury categorically stated that the SoA was in the best interests of the depositors, neither the depositors who had the most to lose nor the Deputy Demptster could see that it was & in May ordered that the bank should be liquidated.

When the SoA was rejected Tony Brown admitted in public that it was put forward with the primary objective of protecting the best interests of the IoM. That being the case it is extraordinary that the depositors should have to pay for the costs it incurred on account of the SoA which was not in the best interests of those who had the most to lose from it. Clearly there are grounds for the Depositors to appeal but that would involve them in further costs with doubtful prospect of the Court's decision being overturned.

Fishing with a spin-ning reel & well-baited line

2009-07-01T13:35:00.010+01:00

Under the heading: Regulation and Supervision of Financial Services Companies in the Isle of Man the website www.shelteroffshore.com offers prospective depositors this bait:

"The Isle of Man is almost universally respected in the financial services industry – this is largely because of the level of regulation and supervision in place that all financial services companies have to adhere to when they establish an operational presence on the island.

Any business wishing to commence ‘regulated activities’ – i.e., financial services related business - in or from the Isle of Man has to be licensed by the island’s Financial Supervision Commission, and the Commission will not issue a license unless it is 100% satisfied that the license applicant is “a fit and proper person to undertake the regulated activity.”

The ‘fit and proper test’ is both an initial test at the time of granting a licence, and a continuing test in relation to the conduct of regulated activities. The test takes into account integrity, solvency and competence and is very strict and far-reaching. It is as a result of this that only serious companies ever establish themselves on the island, and therefore, as a result, the most reputable financial advisories trust in these companies to do the best for their clients’ funds."
................................................................................

I have highlighted in bold text the sentence: The test takes into account integrity, solvency and competence and is very strict and far-reaching. It is as a result of this that only serious companies ever establish themselves on the island

Every depositor who has had their life ruined by the Kaupthing bank debacle will seriously question whether the directors, backed by the the FSC, acted with "integrity, solvency and competence" when they placed totally unsecured over 50% of the banks assets into Kaupthing UK, knowing that it would be at risk of being substantially lost in administration if the parent bank in Iceland failed.

At least the website does say: "The Isle of Man is almost universally respected..." It would have been better spin if the site had spent some time qualifying exactly what it meant by 'almost'. But that would have defeated the purpose of the fishing expedition as the bait would not have looked so attractive.

The word is spreading

2009-06-28T19:47:00.006+01:00

The much respected blogger Richard Murphy of the influencial campaigning organisation Tax Research UK has published my letter to the Manx Herald: read here This will be seen by many people & the message will be passed on to many more.

Wealth warning - don't deposit in the Isle of Man

2009-06-27T05:03:00.008+01:00

The Isle of Man is living in a little world of its own. Its government & Treasury behave as though there were no global financial crisis and that the conclusions & recommendations of the g20 do not apply to them. When it comes to knowing whether your money is safe, the best it can do if your bank can't pay you is offer compensation up to £50,000. Even then it is conditional and does not pay out on demand because it is not funded.

In doing so the IoM is totally out of step with other governments who if necessary have been prepared to nationalise a bank in order to protect savers if it is unable to meet its liabilities to depositors. But in the Isle of Man the chief of the FSC has said that a bank should be allowed to fail, & that savers should understand that there are 'risks' to depositing as there are with investing.

Though the IoM does not have a bank of last resort it does have over 30 banks with something in the order of £60billion in deposits between them. What is it that stops the Treasury negotiating a loan from the banks to repay KSFIOM depositors the money they have lost because of the serious regulatory failure of the Island's FSC? The figures show that the loan could be repaid in 6 years from the recovered assets of the bank.

Instead of being imaginative the Treasury choses to stick to the easy way out, namely allowing the DCS to take care of the first £50,000, leaving depositors who have lost more than this having to take pot luck in what is left in liquidation of the bank.

Does the IoM government believe that ignoring the special & specific circumstances that led to the crash of a solvent bank will not have an impact on the future of deposit taking? Does it seriously think the Depositors' Action Group will give up & go away? Does it believe that by its banks offering higher rates of interest than elsewhere people will feel secure in trusting the Isle of Man with their hard earned savings when they find out the great risk they are taking in doing so?

A worthless Parental Guarantee

2009-06-25T10:37:00.005+01:00

The IoM Financial Supervision Commission called upon the Kaupthing hf bank (the parent bank in Iceland) to give a Parental Guarantee to support its IOM subsidiary.
This Guarantee was given so that when looking at 'risk' a prospective depositor in KSFIOM was assured that savings put into the bank were backed by it.

Depositors had every right to believe that the Guarantee was copper-bottomed, it having been endorsed by the FSC.

Kaupthing hf was nationalised by the Icelandic government, & guess what happened to the Parntal Guarantee? Yes, it went into the bin!

Nevertheless it was right to look at whether binning it was the end of the matter. A parental guarantee must have had some force in law & could not simply be set aside unless there was built into the guarantee that under certain circumstances it could be declared nul & void.

So the depositors' legal beagles asked the FSC for copy of the Kaupthing parental Guarantee. What was the response of the FSC? A letter stating that this document was confidential. Could there be anything more absurd than telling depositors that they could not see the actual guarantee which had been a factor in them depositing in KSFIOM?

After pressure was brought to bear it was released. To the shock & horror of depositors it transpired that it is essentially a letter, comprising only one paragraph, without seals or witnesses, whereby Kaupthing Hf undertakes to pay any liabilities that KSFIOM is unable to meet – i.e. it is a shortfall guarantee, not what most people understand as a “guarantee”, which would mean that Kaupthing Hf fully stood over KSFIOM. The guarantee is said to be unsecured.

The acceptance of such a worthless guarantee is another instance of serious regulatory failure on the part of the FSC.

What happened to the £550million of KSFIOM assets?

2009-06-22T08:59:00.005+01:00

There is still confusion in some circles about what exactly happened to the £550million (approx) of KSFIOM assets that were transferred from Kaupthing hf (the Icelandic parent Company) to KSFUK.

These assets were transferred by the KSFIOM directors after consultation between the IoM Financial Supervision Commission and the UK Financial Services Authority. The depositors believe that the directors failed to exercise due diligence because they they sanctioned such a large sum to be transferred totally unsecured to a bank within the Kaupthing group, knowing that if the parent bank in Iceland were to collapse then the sister banks were at serious risk of doing the same.

The FSA & FSC both knew way back in March 2008 that there was a deteriorating financial situation in Iceland. Kaupthing hf was the largest bank in Iceland and it was 'at risk' in the whole Icelandic financial scenario.

In October 2008 there was a run on KSFUK but Kaupthing hf was unable to keep its subsiduary from facing insolvency & it went into administration. Subseqently Kaupthing hf was judged to be insolvent and it was nationalised. This meant that the KSFIOM assets were in the KaupthingUK 'pot' leaving KSFIOM as an unsecured creditor. The secured creditors had first claim on the assets of KSFUK. This has resulted in approximately 50% of the KSFIOM money being lost in the administration of KSFUK.

Who is to blame for this disaster? Iceland? Alistair Darling? the FSA? the FSC?
In the final analysis the responsibility for the loss of KSFIOM assets rests with the IoM FSC & the bank's directors. It was they who did the unforgivable by putting over 50% of the bank's assets totally unsecured into a sister bank that they knew could fail if the parent bank in Iceland were to fail.

The FSC has sought to blame the FSA for not following the Memorandum of Understanding between them by advising it of the deteriorating situation & hence the need to move the assets before the plug was pulled on KSF UK. Whatever the reason for the FSA failing to do this the fact remains that the FSA was only ever in an advisory role, so the ultimate responsibility for safeguarding the KSFIOM assets rested with the bank & the FSC.

The directors put all the £550million into one basket. Why did they not do the logical thing and spread the risk by putting the money into a number of other banks?

Cock-up is the order of the day in the IoM

2009-06-19T08:00:00.004+01:00

Today I can do no better than quote from the Manx Herald lead article of 18 June:

Once again Members (of the Tynwald )used the opportunity to demonstrate (with the odd exception) their aptitude to dodge the issue whenever the whiff of corruption and maladministration wafts their way.

Tuesday afternoon’s sitting of Tynwald (16th June) produced further evidence that, although the Isle of Man may have the longest running parliament in the world, there is still a colossal way to go before the IOM can consider its parliament has the integrity to match its longevity.

The IOM might not quite match Jersey for some of its out dated feudal practices, or North Korea’s penchant for detonating nuclear bombs and imprisoning journalists, but it does exhibit other traits characteristic of a ‘Rogue State’.

Namely, when the authorities are called upon to scrutinize certain failed administrative procedures, account for any deficiencies within them, and name the parties responsible for the failure - it almost always manages to demonstrate a world-leading expertise in finding nothing much wrong; and that no one is required to be held accountable. Even Zimbabwe would be proud of the record the IOM has for such travesties.

With a few exceptions the 'parish council' politicians of the IoM can not deal with the really big issues that face the IoM. Regrettably the army of civil servants it employs in the FSC & Treasury can't do much better either. Cock-up seems to be the order of the day and they have the audacity to expect depositors to pay for it.

The depositors' 'Memorial' website

2009-06-18T06:38:00.003+01:00

There are two sides to every coin. One side of the Kaupthing IoM coin puts the ultimate blame for the Kaupthing bank debacle four square on the shoulders of the IoM Financial Supervision Commission and the bank's directors. The other side of the coin shows up the involvement of the UK government & the Financial Services Authority in the whole disaster. See the depositors' 'memorial' site here

There is now international acceptance (eg: by the g20) that whilst there were many weak links in the chain, regulatory failure was one of them. But why should depositors - who put their trust in what they were told was high quality bank regulation in the IoM - lose out? Why does the IoM government not accept that its FSC was one amongst many that failed depositors across the globe? Other governments have undertaken to vouchsafe savings deposited in banks under their jurisdiction so why doesn't the Isle of Man government do the same?

The IoM is a major player in the off-shore financial services market. If its government choses to ignore the facts, accept responsibility & seek to put things right by the depositors then it will invite other prospective depositors to look elswhere to put their money..

In defence of Mr. David Cannan MHK

2009-06-16T21:58:00.003+01:00

In the Tynwald on 16 June Mr. Allen Bell (Treasury Minister) set out to put down the courageous Mr.David Cannan.

Mr. Cannan should not be made some sort of scapegoat & discredited in this matter. At the outset he & fellow MHK's were given 'best advice' from professionals and that advice favoured the proposed SoA. At that point it was understandable that he should support the SoA in the light of the way it was sold to the Tynwald.

If Mr. Cannan had known at the time what the outcome was to be, and had he known the enormous cost of engineering the SoA, I am sure he would not have supported what the professionals were so strongly advocating as being in the depositors' best interests and those of the IoM.

With hindsight Mr.Cannan can see that the SoA was in fact a scheme that put depositors' interests second to those of the IoM, & he has the guts to stand up for what he feels is an injustice being done to depositors.

The IoM needs more politicians like him -- politicians who have integrity & recognise injustice when they see it. I believe that he knows the FSC & directors failed in their duty to protect the trust depositors put in them, and I admire his willingness to speak up to see that a terrible wrong is put right.

A credible solution would be for the Treasury to borrow the money 'in house' from the banks and pay it back as the assets of KSFIOM are recovered. If the Tynwald had the moral courage & integrity to sort the Kaupthing debacle by restoring all deposits 100% through such an arrangement,then it would be giving a clear signal to the world that the IoM is assuredly the safest & securest place to deposit one's life savings.

The UK Ministry of Justice sits on the fence over the Kaupthing debacle

2009-06-14T08:32:00.007+01:00

In constitutional terms as a Crown Dependency the IoM comes under the umbrella of the Ministry of Justice. You would think that its political chiefs Lord Bach & Jack Straw would have some concern that the IoM choses to ignore what Gordon Brown has to say about governments protecting savings in the banks in their jusisdiction. Not at all. Gordon Brown's latest pronouncement: "where there is unfairness & irresponsibility we have got to act" runs like water off a duck's back to the IoM government.

The MoJ does not think the Kaupthing debacle is of such a serious order as to require Her Majesty's Government to call upon the IoM government to come into line with UK & g20 policy, or for HMG to consider legislating to enforce compliance with international policy objectives to deal with the banking crisis. Instead it simply supports the IoM government in it resorting to its Depositors' Compensation Scheme to settle the matter.

The MoJ will not come off the fence & change its attitude in respect of the Kaupthing affair unless the economic independence of the IoM is threatened in such a way that the island might become a liability on the UK taxpayer.

Compensation versus Restoration 100%

2009-06-13T08:12:00.005+01:00

The Depositors' Compensation Scheme [DCS] is a stautory provision made by the IoM government to provide a means of compensating depositors up to £50,000 in the (at the time) unlikely event of a bank going bust. In effect it means that anything over £50,000 deposited is 'at risk' of being lost in the event of there being no recoverable assets in liquidation.

In the face of the global financial crisis & the collapse of KSFIOM the Financial Supervision Commission [FSC] is now at pains to emphasise this point. Banks must not only do the same but explain the timeframe that depositors might expect to have their money restored to them in the event of a claim having to be made.

The IoM FSC is implementing the DCS as though it had no responsibility for the reason why it is having to do so, namely its own regulatory failure to protect depositors' money in the first place.

To implement the DCS the government is having to borrow the money to meet its statutory obligations. However, in respect of the Kaupthing bank the government will recover what it borrowed from the liquidator as the assets are realised. No doubt in addition it will seek to recover the costs of the whole process, so that those depositors with over £50,000 at stake will lose out a percentage of the bank's recovered assets.

Now the big question is why the government doesn't have any regard to the special circumstances in which KSFIOM lost its licence, and make special provision for all depositors to have their money returned 100%. The DAG asserts firmly & rightly that it should. But the IoM government choses to behave as though it has no moral obligation to make provision for this to happen.

Quite simply, as the government doesn't have a bank of last resort (it should), it could elect to borrow the money from the 20 banks on the island & repay the loan from the recovered assets of the bank. It is borrowing money from the banks anyway to implement the DCS, so why doesn't it borrow the extra to repay depositors 100%?

It choses not to because resolving the KSFIOM debacle only requires it to fall back on the bottom line provision of its statutory DCS. That is what Tony Brown, Chief Minister, told the Treasury Select Committee on 3 February 2009.

Don't even think about it being 'fair', 'right' or 'just'. Those words are not in the vocabulary of governments. It's what the law says that counts.

100% return is now only possible if the government finds itself under enormous pressure to change its stance and order the Treasury to come up with a plan that meets the demands of the DAG. That pressure will not come about from any sudden sense of 'fair play' or the need for 'justice' to be done, but from a serious threat to - or decline in - the Manx economy with resultant pressure being brought to bear by the banks.

Plain English is not understood in the IoM

2009-06-12T15:09:00.003+01:00

The blurb being issued by the IoM's Depositors' Compensation Scheme is a classic example of gobbledegook in communicating to depositors the mechanisms of claiming compensation.

The 'Plain English Campaign' website here has been active since 1979 helping government & local authority agencies to get rid of gobbledegook in their official statements & leaflets. The IoM government needs urgently to look at the excellent courses offered to train agency staff how to communicate in language that is simple to understand.

In response to a depositor's concern about the security of an on-line claim, the IoM DCS Agency wrote::

"With regard to the security aspect I would make the following comments. We assessed two key risks - the access risk (ie at the database level) and the transmission risk. The basic infrastructure of the database contains levels of control at the access point (ie login/password credentials) and data level security (based on credential and roles). The transmission risk was more problematical in that with a start date of 27 May, but against a backdrop of great pressure to act (the bank having been closed since 8 October 2008) the decision had to be made whether to secure the transport layer for sessions with the consequential impact on the development time.

The conclusion reached was that the risk of exposing the data traffic itself was slight in that several separate data sets would need to be captured to obtain meaningful information. Thereafter, compensation payments themselves will be dependent upon a number of other checks both data validation and physical checks, before payments are released to a location known to be that of the claimant/depositor.

I am not entirely sure if this answers your point, but I would be happy to consider any points you might wish to make.

Regards
Mike Fayle
Scheme Agent"

The 'Plain English Campaign' have asked for examples of government agency gobbledegook. I will be sending Mr. Fayle's letter to the Campaign as an entry for the Campaign's Golden Bull Award for the worst gobbledegook 2009.

The IoM - scheming, deceitful, contemptuous & hypocritical

2009-06-11T07:21:00.012+01:00

The more we learn about about the Isle of Man the more we come to discover that it has a financial services industry that is built of smoke & mirrors on quicksand foundations. The banks & other fiancial institutions are off-shore for no other reason than to operate with lower costs in order to make higher profits.

The way the Manx banks & finance houses advertise themselves is all smoke & mirrors designed to give the appearance of offering low risk security coupled with high returns on money placed there. The minute the benefits outweigh the cost these banks leave the island not on the next ferry (that's too slow) but on the next plane.

The simple fact is that once you deposit money in the Isle of Man it ceases to be yours; it becomes the property of the bank. You are nothing more than an unsecured creditor, a liability to the bank because it owes you money. The question of trust does not come into it, so if the bank goes bust you can only fall back on a discredited depositors compensation scheme that can not pay out 'on demand' as it is not funded.

Having lost your life savings you discover that there are secured creditors in front of you in the queue who will take what was once your money before you see a penny of it. Then you also discover that there's also those guys in wigs in front of you, & the government itself takes all it can from recovered assets what it has paid you in so-called 'compensation' By the time you get to the cashier there's a huge chunk of your money gone!

The banks' information to potential clients is composed of 'smoke & mirror' advertising. The blurb is written to entice you to part with your money in their favour. You are a 'somebody' until you have parted with your money, then you become a 'nobody'. Unless you live on the IoM you are faceless - just a bank account number, a potential source of more money for them to make big money before you get your bit of interest. Then if it all goes wrong - tough! The bank's interest in you vapourises instantly.

When KSFIOM shut its doors denying depositors their savings, did they get a letter of profuse apology from the bank directors explaining what had happened and assuring them that they would be living on bread & water until they had done everything in their power to see that you got your money back? No! Did they take a salary cut? No! Did they claim a bonus? YES!

So now depositors have learnt at great personal cost, deprivation & suffering that the IoM - its finance houses, its government & its failed Finanial Supervision Commission,& its compensation scheme - is scheming, deceitful, contemptuous & hypocritical.

Dispossessed depositors are saying loud & clear on Youtube.com: DON'T BANK ON THE ISLE OF MAN - it could seriously ruin your wealth:
view HERE

Is it now 'MISSION IMPOSSIBLE' for the DAG?

2009-06-08T14:19:00.000+01:00

The IoM government has taken up a bottom line position of doing the least that it is obliged to do under its statutory obligations, namely implement the Depositors' Compensation Scheme. Quite simply it doesn’t have to do anything else because:

1. it refuses to accept that the collapse of the Kaupthing bank was ultimately due to the regulatory failure of the FSC and the bank’s directors;

2. it does not feel under any moral obligation to accept that the global financial crisis means that it should treat the collapse of KSFIOM any differently than if the bank had failed in 'normal' conditions;

3. it will not concur with the UK Prime Minister’s words of 7 June: "where there is unfairness & irresponsibility we have got to act"

Thus the IoM government will not review its position unless there were a significant development that either seriously threatened its constitutional independence from the UK or compromised its economic stability.

What could happen to force the IoM government to review its position?

1. if the UK government exercised its constitutional prerogative by calling on the IoM government to come into line with the international policy objectives of the g20, and underwrite 100% all deposits in KSFIOM;

2. if there were a crisis of confidence in the IoM banking system resulting in an exodus of funds from the IoM.

In respect of (1) the UK Ministry of Justice to date has sat on the fence as though the issues in the document 'The Road to Recovery' were irrelevant to the IoM. Furthermore, it has not considered the KSFIOM debacle to be of such a serious nature as to require HMG to intervene under its constitutional powers.

In respect of (2) the failure of KSFIOM ought to have been enough to cause many to remove their deposits & investments in the IoM, but this bankrupcy has hardly caused a ripple in the media due to a large extent to the other issues that have taken precedence in the news headlines. Likewise the DAG press releases have not made the desired impact in the face of the many other competing issues confronting people (eg: unemployment, bankruptcies, inability to pay mortgages, the Westminster allowances scandal,etc.)

What then could bring about a change in position on the part of the IoM government?

There are many who believe that only the following will now bring about a change in the position:

1. legal action against the FSC & Directors of the bank
2. a high profile campaign to discredit the IoM in the eyes of the world.

Watch this space for further developments

"Where there is unfairness & irresponsibility we have got to act" - Prime Minister

2009-06-07T18:40:00.000+01:00

These were Gordon Brown's own words today. The DAG will be jumping on his tail afresh, because the Kaupthing depositors have been treated unfairly compared to depositors in other Kaupthing banks in Europe. Furthermore, there has been gross irresponsibility on the part of the IoM Financial Supervision Commission.

The IoM is a British Crown Dependency, its citizens are British Subjects and thousands of British people have deposited their life savings in the Island. The Ministry of Justice has a responsibility to ensure that the IoM government comes into line with UK & pan-European policy to safeguard deposits in its banks.

The Prime Minister has said: "the global financial crisis needs a global solution", & he has made it clear that part of that solution is to ensure that people's savings are truly safe in the banks where they have been placed. That must include the Crown Dependency of the Isle of Man.

Dirty tricks being tried by the Isle of Man government

2009-06-07T06:38:00.000+01:00

Tony Brown, Chief Minister of the IoM, told the UK Treasury Select Committee on 3 February that his government would be resolving the Kaupthing bank issue by implementing its well-proven DCS. Then why didn't he do just that ? Why all the hugely expensive SoA hanky-panky?

The simple answer is that the IoM government is on record of having considered that a SoA over the DCS was first & foremost in the best interests of the IoM. Any so-called benefit to depositors was an entirely secondary consideration.

The FSC & bank Directors made a serious error of judgement which they know fully well, but the incestuous system has been busy throwing money at a scheme of obfuscation to cover up for the gross regulatory failure that took place prior to 8 October 2008. Now the government want the depositors to pay for their costs in respect of the failed Scheme of Arrangement! No doubt the people of the IoM will be pleased to sacrifice any moral notion for justice to be done in favour of an unjust resolution that makes the depositors pay for yet another failure of their rotten government.

The need for a clean up in politics is not confined to Westminster; it reaches into the black heart of this rotten Crown Dependency.

The purpose of the website 'DON'T BANK ON THE ISLE OF MAN'

2009-06-05T17:57:00.005+01:00

This website www.kaupthingiom-dag.co.uk is on the internet because dispossessed depositors do not want expats & others throughout the world to be victims of the collapse of another bank in the Isle of Man. To this end they feel that they are duty bound to make other potential depositors aware of the risks involved in putting their trust in this offshore financial centre that now has a record of 3 bank failures in which thousands have lost huge sums of hard earned money.